The Markets (as of market close September 30, 2016)

October 3rd, 2016

Last week equities started off well enough, still feeding off the Fed’s decision to leave interest rates alone for the time being. But fear of financial instability for one of the world’s largest banks may have prompted many investors to sell, causing the market to tumble by mid-week. However, news that the bank in question was near a deal to settle some of its financial issues quelled some investors’ fears, lifting the market back to where it left off the prior week.

Both the Dow and S&P 500 posted slight gains, as did the NASDAQ. The Russell 2000 and Global Dow rebounded by last week’s end, but not enough to avoid posting a slight loss for the week.

The price of crude oil (WTI) closed at $48.05 per barrel last week, up from $44.59 per barrel the previous week. The price of gold (COMEX) fell, closing at $1,318.80 by late Friday afternoon, down from the prior week’s price of $1,341.10.

Last Week’s Headlines

The gross domestic product grew at a slightly faster pace in the second quarter compared to the first. The current pace of economic expansion is the slowest since 1949.

Following several months of positive gains, August proved to be a soft month for consumer income and spending, leading to weak inflationary trends.

During testimony before the Committee on Financial Services, FOMC Chair Janet Yellen indicated that the majority of the Committee favors raising interest rates, but there is no fixed timetable. She said the Committee expects the jobless rate to fall further and job growth to continue.

The U. S. trade deficit narrowed in August from July, according to the latest report from the Census Bureau.

The manufacturing sector followed a favorable July with a weak August.

Sales of new homes dropped off for the month.

Consumer confidence in the economy grew in September. The Conference Board Consumer Confidence Index® grew to 104.1 in September, up from 101.8 in August.

Consumer confidence in economic conditions edged upward in September due to gains among higher income households, while the Sentiment Index among households with incomes under $75,000 remained at the same level for the third consecutive month.

Eye on the Week Ahead

Job growth has been steady throughout much of the year, averaging about 187,000 new jobs per month. The upcoming jobs report this week is expected to show continued growth for September. Also worth noting are reports focusing on the manufacturing sector, which has slowed during the summer but may pick up in the fall.

Maintaining the focus on our investment process at BWFA amidst the uncertainty in the economic and political environment is what we know is the most important thing we can do for clients as we work together to meet long term financial goals!